Vietnam, wracked by eco woes, plans new reforms

Hanoi: After four years of economic instability, Vietnam is embarking on reforms some believe could be its most significant since steps started in 1986 that ended stifling central planning and, eventually, turned the war-torn country into a tiger.

However, there`s substantial skepticism that policymakers can fend off resistance to major change from state-owned companies and other interest groups, including private conglomerates, whose influence has surged.

Months of heated discussion have produced a consensus that Vietnam, wracked by Asia`s worst inflation and other woes, needs to change tack, as it did 25 years ago when the "Doi Moi" (renovation) policy took flight.
"It`s not just talk anymore. This is serious business now," Vice Minister of Planning and Investment Dang Huy Dong told a news agency. "We`ve gone through careful analysis, painful analysis, to see where the shortcomings are and areas for improvement."

It`s far from certain, though, that the government will pursue reforms that are broad enough and deep enough to fix debt-ridden state banks and rein in inefficient state enterprises (SOEs) such as Vietnam Shipbuilding Industry Group, or Vinashin, which embarrassingly defaulted last year.

"The Vietnamese economy, once again, is at a crossroads," said Le Dang Doanh, a reform-minded economist who has advised current and former leaders.

And this time, in Doanh`s view, moving decisively down a reform path is "more difficult because it touches powerful interest groups that are operating behind the scenes."